matter - Treet Corporation

TREET CORPORATION LIMITED

BLADES

RAZORS

SOAPS

BIKES

BATTERIES

CORRUGATEDBOXES

PHARMACEUTICALPRODUCTSPhone: (+92-42) 111 187 338

H E A D O F F I C E72-B, Industrial Area Kot Lakhpat,

Lahore - 54770, Pakistanwww.treetonline.com

All yourneeds thatmatter!

CompanyInformation 02

Directors’ Review 03

GOVERNANCE

Condensed Interim Consolidated Statement of Financial Position 06Condensed Interim Consolidated Statement of Profit or Loss Account 07Condensed Interim Consolidated Statement of Comprehensive Income 08Condensed Interim Consolidated Statement of Changes in Equity 09Condensed Interim Consolidated Cash Flow Statement 10Notes to the Consolidated Condensed Interim Financial Statements 12

CONSOLIDATED FINANCIAL STATEMENTS

Condensed Interim Statement of Financial Position 17Condensed Interim Statement of Profit or Loss Account 18Condensed Interim Statement of Comprehensive Income 19Condensed Interim Statement of Changes in Equity 20Condensed Interim Cash Flow Statement 21Notes to the Condensed InterimFinancial Statements 23

UNCONSOLIDATED FINANCIAL STATEMENTS

TABLEOF CONTENTS

2

First Treet Manufacturing Modaraba

Mr. Syed Shahid AliMember

Group Chief Financial Officer

Mr. Mohammad Mohtashim Aftab

Company Secretary &Head of Legal

Ms. Zunaira Dar

Head of Internal Audit

Mr. Muhammad Ali

External Auditors KMPG Taseer Hadi & Co.Chartered Accountants Lahore.

Legal Advisors Syed Ali Rizvi - Khosa & Rizvi

Share Registrar

Corplink (Private) LimitedWing Arcade, 1-K Commercial,Model Town, LahoreTel: 042 35916714Fax: 042 35839182

MCB Bank LimitedMeezan Bank Limited

National Bank of PakistanSamba Bank LimitedSilk Bank LimitedSindh Bank LimitedSoneri Bank LimitedThe Bank of PunjabUnited Bank Limited

MCB Islamic Bank Limited

Bankers

AL-Baraka Bank Pakistan LimitedAllied Bank LimitedAskari Bank LimitedBank Alfalah LimitedBank Islami Pakistan Limited

Habib Bank Limited

Dubai Islamic Bank Pakistan LimitedFaysal Bank LimitedHabib Metropolitan Bank Limited

JS Bank Limited

Group Companies

Treet Holdings LimitedTreet HR Management (Pvt) Ltd.Treet Power Limited

Global Arts Limited

Society for Cultural EducationRenacon Pharma Limited

Treet Battery Limited

Registered Office 72-B, Industrial Area, Kot Lakhpat,Lahore.Tel: 042-35830881, 35156567 & 35122296Fax: 042-35114127 & 35215825E-Mail: [email protected] Page: www.treetonline.com

Board of Directors

Mr. Syed Shahid AliChief Executive OfficerMr. Syed Sheharyar AliExecutive DirectorMr. Muhammad Shafique AnjumExecutive DirectorMr. Imran AzimNon-Executive Director/ChairmanDr. Salman FaridiIndependent DirectorMs. Sidra Fatima SheikhIndependent DirectorMr. Munir Karim BanaNon-Executive Director

Audit Committee

Dr. Salman FaridiChairman/MemberMr. Imran AzimMemberMr. Munir K. BanaMember

Human Resource &Remuneration Committee

Ms. Sidra Fatima SheikhChairperson/MemberMr. Imran AzimMember

COMPANY INFORMATION

3 FIRST QUARTELY REPORT 2020

DIRECTORS’ REVIEW

The Directors are pleased to present the un-audited consolidated Financial Statements of the Group for the three months period ended on September 30, 2020.

SUMMARY OF COMPARATIVE FINANCIAL RESULTS

BUSINESS REVIEW – GROUP RESULTS

It is our pleasure to report that the Group’s operational performance has shown some improvement even in a difficult business environment. For the three months period, the Group’s turnover was Rs. 3,554 million, registering a growth of 6% over the corresponding period of last year (Rs. 3,351 million). The increase reflects upside in sales of blade, soap, battery and pharmaceutical products.

For the three months period under consideration, Operating Profit is Rs. 111 million which is same as last year corresponding period. Loss after tax is Rs. 178 million which is 32.32% lower compared to last year same period. The reduction in loss is primarily due to revenue growth, strict control over costs, and better profit margin management. This level of loss has delivered a negative EPS of Rs. 0.97 per share [2019-20: Rs. (1.59)] per share last year same period.

Segment wise sales is as follows:

* The sales of corrugation segment includes intercompany sales of Rs. 16 million (2019-20: Rs. 7 million)

(Rupees in million)

September 30, 2020 September 30, 2019

% ChangeTreet Consolidated Treet Consolidated

(1) (2) (3) (4)(1) over

(3)(2) over (4)

Sales (net) 1,867 3,554 1,718 3,351 8.67% 6.06%Gross Profit/(Loss) 642 545 771 582 -16.73% -6.36%Operating Profit/(Loss) 352 111 475 111 -25.89% 0.00%Profit/(Loss) before Taxation from Continuing Operations 374 (89) 186 (214) 101.08% -58.41%

Net Profit/(Loss) after taxation from Continuing Operations 329 (156) 140 (260) 135.00% -40.00%

Net Profit/(Loss) after taxation 329 (178) 140 (263) 135.00% -32.32%EPS (in Rupees) 1.93 (0.97) 0.84 (1.59) 129.76% -38.99%

(Rupees in million)

Sales

Quarter Ended% Change

September 30, 2020 September 30, 2019

Blades 1,848 1,692 9.22%

Trading 19 26 -26.92%

Battery 934 718 30.08%

Corrugation* 342 500 -31.60%

Soap 296 271 9.23%

Bike 5 38 -86.84%

Pharmaceutical 126 113 11.50%

Total 3,570 3,358 6.31%

4

Syed Shahid AliChief Executive Officer

LAHOREOctober 27, 2020

A brief review of the operational performance of the Group’s entities is as follows:

TREET CORPORATION LIMITED (TCL)

Treet Corporation Limited is a flagship project of the Group and is engaged in manufacturing and sales of blades and razors. For the three months period, the turnover was Rs. 1,867 million, registering an increase of 8.67% over the same period of last year. Gross profit recorded at Rs. 642 million with reduction of 16.73% as compare to same corresponding period of last year (2019-20: Rs. 771 million). Profit after tax is Rs. 329 million which is almost 2.35 times higher as compare to last corresponding period ( 2019-20: Rs. 140 million).

FIRST TREET MANUFACTURING MODARABA (FTMM)

a) BATTERY

The battery segment has shown healthy increase in the volume which is approximately 17% higher compared to last year same period. Furthermore, the estimated market share of our battery has increased over 7% during the current period.

The net revenue for the period is Rs. 934 million, which is 30% higher compared to last period. The business has posted gross loss of Rs. 115 million which has improved by 55% compared to last period.

b) CORRUGATION

The net revenue for the period is Rs. 342 million which has decreased by 31.60% as compared to last comparable period. The decrease in revenue is attributable to low economic activity which is due to COVID-19. The business has posted a gross loss of Rs. 11 million compared to a gross profit of Rs. 22 million. The loss is mainly due to increase in raw material cost, higher freight charges and limited pass through impact (i.e. increased cost is not passed on to the customer due to intense competition).

Efforts are being made to broaden the customer base through market diversification. Moreover, prices are also being rationalized in tandem with the increased costs (raw material, salaries etc.) however, with time lagged impact.

c) SOAPS

The net revenue for the period is Rs. 296 million, which is 9% higher compared to last period. The business has posted gross profit of Rs. 11 million which has declined by 72% compared to last period.

ACKNOWLEDGEMENTS

We place on record our gratitude to our valued customers for their confidence in our products and pledge to provide them the best quality by continually improving our products. We would also like to thank all our colleagues, management and factory staff who are strongly committed to their work as the success of your Company is built around their efforts. We also thank our shareholders for their confidence in our Company and assure them that we are committed to do our best to ensure best rewards for their investment in the Company.

DIRECTORS’ REVIEW


CONSOLIDATEDFINANCIAL STATEMENTSFOR THE PERIOD ENDED SEPTEMBER 30, 2020

6

September 2020 June 2020 Un-audited Audited

Note (Rupees in thousand)Non-Current AssetsProperty, plant and equipment 15,259,642 15,502,995 Investment property 12,895 12,896 Long term investments 435,386 426,320 Long term loans and deposits 85,280 82,522 Deferred tax asset - -

15,793,203 16,024,733

Current assets Stores and spares 355,966 350,306 Stock-in-trade 1,864,759 2,296,876 Trade debts - unsecured considered good 834,710 878,646 Short term investments 297,100 244,678 Loans, advances, deposits, prepayments and other receivables 1,930,419 1,855,062 Cash and bank balances 687,098 476,937

5,970,052 6,102,505 Asset held for sale 2,020,906 2,020,906

Current liabilities Current portion of long term liabilities 39,602 54,164 Short term borrowings 12,414,756 13,034,254 Trade and other payables 2,032,330 1,807,392 Provision for taxation 234,706 126,126

14,721,394 15,021,936 Net current assets (6,730,436) (6,898,525)

Non-current liabilitiesLong term deposits 1,213 11,214 Long term loans 291,467 126,672 Liabilities against assets subject to finance lease 54,511 54,511 Deferred liabilities 738,289 778,555

1,085,480 970,952 Contingencies and commitments 5 - - Net assets 7,977,287 8,155,256

FINANCED BY:Issued, subscribed and paid-up capital 1,708,142 1,698,313 Reserves 5,623,672 5,618,059 Unappropriated profit (4,464,677) (4,318,826)Surplus on revaluation of fixed assets 4,873,886 4,893,916 SHARE HOLDERS’ EQUITY 7,741,023 7,891,462

Minority Interest 236,264 263,794 7,977,287 8,155,256

The attached notes 1 to 11 form an integral part of this condensed interim financial statements

CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UN-AUDITED)As At September 30, 2020



Imran AzimDirector

Mohtashim AftabGroup Chief Financial Officer

Consolidated Financial Statements


3 Months endedJuly to

September2020

July to September

2019Note (Rupees in thousand)

Revenue -Net 6 3,554,069 3,350,942 Cost of revenue 7 (3,009,094) (2,768,556)Gross Profit / (Loss) 544,975 582,386

- Administrative expenses (131,336) (113,971)- Distribution cost (302,374) (357,792)

(433,710) (471,763)Operating Profit / (Loss) 111,265 110,623

Other income 104,709 10,816

215,974 121,439

Financial expenses (280,505) (321,923)Share of profit / (loss) of associate (4,354) -

(68,885) (200,484)

Workers' Profit Participation Fund (19,703) (9,461)Workers' Welfare Fund (67) (3,989)

(19,770) (13,450)

Profit / (Loss) before taxation (88,655) (213,934)

Taxation - Group (65,368) (46,433)- Associated company (1,664) -

Profit / (Loss) from continuing operation (155,687) (260,367)

Profit / (Loss) from discontinued operation (22,659) (2,302)

Profit / (Loss) after taxation (178,346) (262,669)

Loss attributable to minority interest 12,465 15,756

Loss attributable to group (165,881) (246,913)

Earnings / (Loss) per share (0.97) (1.59)


CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS (UN-AUDITED)For the period ended September 30, 2020



Imran AzimDirector


8


September2020

July to September

2019(Rupees in thousand)

Profit / (loss) after taxation (165,881) (246,913)

Other comprehensive income Available -for -sale financial assets

Transfer to profit and loss account on disposal - - - -

Total comprehensive income / (loss) for the period (165,881) (246,913)

Appropriations have been reflected in the statement of changes in equity.


CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)For the period ended September 30, 2020



Imran AzimDirector




CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)For the period ended September 30, 2020

Share Capital

Capital Reserve

Fair Value Reserve

Statutory Reserve

Surplus on revaluaiton

of land buildings - net of tax

Employee stock option compensa-tion reserve

General Reserve

Unappro-priated Profit

Total

-----------------------------------------(Rupees in thousand)-----------------------------------------

Balance as on June 30, 2019 1,600,846 4,492,923 1,654 511,941 4,642,427 10,522 266,400 532,119 12,058,832

Reversal of impairment - - 7,038 - - - - - 7,038

Reversal of expense under ESOS - - - - - (9,759) - - (9,759)

Total comprehensive income for the period - - - - - - - (246,913) (246,913)

Incremental depreciation transferred from surplus on revaluation of property, plant and equipment - - - - (3,152) - - 3,152 -

Balance as on September 30, 2019 1,600,846 4,492,923 8,692 511,941 4,639,275 763 266,400 288,358

11,809,198

Balance as on June 30, 2020 1,698,313 4,818,590 20,394 511,941 4,893,916 734 266,400 (4,318,826) 7,891,462

Issuance of of shares under employee share option scheme (ESOS) 9,829 5,613 - - - - - - 15,442

Total comprehensive income for the period - - - - - - - (165,881) (165,881)

Incremental depreciation transferred from surplus on revaluation of property, plant and equipment - - - - (20,030) - - 20,030 -

Balance as on September 30, 2020 1,708,142 4,824,203 20,394 511,941 4,873,886 734 266,400

(4,464,677) 7,741,023


CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)For the period ended September 30, 2020



Imran AzimDirector


10

July to September

2020

July to September


CASH FLOW FROM OPERATING ACTIVITIESProfit / (Loss) before taxation (111,314) (216,236)Adjustments for non-cash items :

Financial charges for the period 280,505 321,923 Depreciation on property, plant and equipment 238,442 199,309 Provision for gratuity 18,010 11,793 Provision for superannuation fund scheme 15,276 9,876 Profit on bank deposits (3,777) (4,127)Profit on disposal of investment held for trading (52,419) (9,184)Impairment on available for sale Investment transferred from equity - (7,038)Share of profit from associated company 4,354 - Employees share option scheme (ESOS) - (9,759)Provision for WPPF and WWF 19,770 13,450 (Gain)/Loss on sale of fixed assets (1,912) (7,434)

518,249 518,809 Operating profit / (loss) before working capital changes 406,935 302,573

(Increase) / decrease in operating assets : Stores and spares (5,660) - Stock-in-trade 432,117 (288,229)Trade debts 43,936 88,808 Short term investments (3) 9,216 Loans, advances, deposits, prepayments and other receivables (37,893) 408,344

432,497 218,139 Increase / (decrease) in operating liabilities

Trade and other payables 412,184 (458,590)Cash generated from /(used in) from operations 1,251,616 62,122

Financial charges paid (469,582) (320,254)Taxes paid (37,464) (45,438)WPPF and WWF 758 6 Payment to gratuity fund (35,849) 21,243 Payment to superannuation fund (28,252) (18,650)

(570,389) (363,093)Net cash inflow / (outflow) from operating activities 681,227 (300,971)

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (UN-AUDITED)For the period ended September 30, 2020



July to September

2020

July to September


CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure incurred (4,901) (7,193)Proceeds from sale of fixed assets 11,724 75,925 Long term investments (15,084) - Long term deposits (2,758) (19,970)Profit received on bank deposits 3,777 4,127 Net cash inflow / (outflow) from investing activities (7,242) 52,889

CASH FLOW FROM FINANCING ACTIVITIES Share capital 9,829 - Share premium 5,613 - Long Term Loan 164,795 - Long Term Deposits (24,563) (2,682)Dividend paid - 565 Net cash inflow/(outflow) from financing activities 155,674 (2,117)NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 829,659 (250,199)CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD (12,557,317) (12,707,437)CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (11,727,658) (12,957,636)

CASH AND CASH EQUIVALENTS

Cash and bank balances 687,098 567,060 Finance under mark-up arrangements (12,414,756) (13,524,696)

(11,727,658) (12,957,636)


CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (UN-AUDITED)For the period ended September 30, 2020



Imran AzimDirector


12

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)For the period ended September 30, 2020

1. STATUS AND NATURE OF THE BUSINESS

The Group comprises:

Holding Company

Treet Corporation Limited (TCL)

Subsidiary Companies / Undertakings

Treet Holdings Limited (THL)First Treet Manufacturing Modaraba (FTMM)Treet HR Management (Private) Limited (THRM) Global Arts Limited (GAL)Treet Power Limited (TPL)Society for Cultural Education (SCE)Renacon Pharma Limited (RPL)Treet Battery Limited (TBL)

1.1 Treet Corporation Limited (the holding Company) was incorporated in Pakistan on 22 January 1977 as a Public Limited Company under the Companies Ordinance, 1913 (now Companies Act, 2017). Its shares are listed on Pakistan Stock Exchange Limited. The principal activity of the holding company is to manufacture and sell razors and razor blades along with other trading activities. The registered office of the holding company is situated at 72-B, Industrial Area Kot Lakhpat, Lahore.

1.2 Treet Holdings Limited was incorporated in Pakistan on 21 October 2004 as a Private Limited Company under the Companies Ordinance, 1984 (now Companies Act, 2017). Global Econo Trade Limited commenced its commercial operations from 01 January 2005. The principal activity of the company is the business of manufacturing and sale of bikes. The company was converted into Public Limited Company (unlisted), and the name and objects of the company have also been changed from that of Global Econo Trade (Private) Limited to Treet Holdings Limited w.e.f June 03, 2015 after complying with the legal formalities. Its registered office is situated at 72 - B, Industrial Area Kot Lakhpat, Lahore.

1.3 First Treet Manufacturing Modaraba (“the Modaraba”) is a multipurpose, perpetual and multi dimensional Modaraba formed on 27 July 2005 under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and rules framed there-under and is managed by Treet Holdings Limited (a wholly owned subsidiary of Treet Corporation Limited), incorporated in Pakistan under the repealed Companies Ordinance, 1984 (now Companies Act, 2017) and registered with the Registrar of Modaraba Companies. The registered office of the Modaraba is situated at 72 - B, Kot Lakhpat, Industrial Area, Lahore. The Modaraba is listed on Pakistan Stock Exchange Limited. The Modaraba is engaged in the manufacture and sale of corrugated boxes, soaps and batteries.

1.4 Treet HR Management (Private) Limited was incorporated in Pakistan on September 18, 2006 as a Private Limited Company under the Companies Ordinance, 1984 (now Companies Act, 2017). The company is engaged in the business of rendering professional & technical services and providing related workforce to the host companies / customers under service agreements. The name of the company has been changed from TCL Labor-Hire Company (Private) Limited to Treet HR Management (Private) Limited with effect from December 31, 2014 after complying with the legal formalities. The registered office of the company is situated at 72-B, Industrial Area, Kot Lakhpat, Lahore. The company is a wholly owned subsidiary of Treet Holdings Limited , which is also a wholly owned subsidiary of Treet Corporation Limited - an ultimate parent, a listed company.

1.5 Global Arts Limited was incorporated in Pakistan on October 26, 2007 as a Private Limited Company under the Companies Ordinance, 1984 (now Companies Act, 2017). The company was engaged in the business of whole range of industrial, administrative, technical and accounting controls as well as janitorial and premises maintenance, providing of contractual employment and supply of labor. The company was converted into Public Limited Company (unlisted), and the name and the objects of the company had also been changed from that of Treet Services Limited to Global Arts Limited with effect from July 23, 2014 after complying with the legal formalities. The Company is now engaged to promote, establish, run, manage, and maintain educational institutions, colleges of arts, research, sciences, information technology and business administration. The company is a subsidiary of Treet Corporation Limited - an ultimate parent company. The registered office of the company is situated at 72-B, Industrial Area, Kot Lakhpat, Lahore.



1.6 Treet Power Limited was incorporated on 20 November 2007 in Pakistan as an unquoted Public Limited Company under the Companies Ordinance, 1984 (now Companies Act, 2017). At present Treet Power Limited is planning to set up an electric power generation project for generating, distribution and selling of electric power. Its registered office is situated at 72-B, Industrial Area Kot Lakhpat, Lahore.

1.7 Society for Cultural Education (SCE) is a Society registered under the Societies Registration Act, XXI of 1860, and having its Registered/Head Office at, 72-B, Kotlakhpat Industrial Area, Lahore. Object clauses include to establish, construct, run, maintain and manage schools, professional schools and colleges, universities, coaching classes, offices, libraries, information centers and other institutions for imparting moral, academic and technical education to children and adults and to promote and encourage the study of all arts, sciences, culture, history and general knowledge, subject to necessary permissions from regulatory bodies, if any and to take over running business of, or affiliate with or obtain affiliation from, any universities, colleges, schools, educational institutes, information centers and/or any other institutions etc.

Treet Corporation Limited is entitled to nominate 70% of the members as well as governing body of the Society. The remaining members are to be nominated by PSV (Private) Limited another Company that is being governed by Professor Pervaiz Vandal and Professor Sajida H. Vandal who are veterans of this field and renowned for their contribution towards Culture and Art.

SCE, being a body corporate, is a subsidiary of the Company in terms of Section 3 of the Companies Ordinance, 1984 (now Companies Act, 2017), since Company is entitled to nominate majority of the governing body of SCE and pursuant to directions given by Securities and Exchange Commission of Pakistan vide letter no. EMD/233/613/2002-826 dated February 24, 2016. Company is circulating the balance sheet and a statement of expenditure pertaining to SCE along with the Financial Statements of the Company.

1.8 Renacon Pharma Limited (RPL) was incorporated on 07 July 2009 as a Private Limited Company under the Companies Ordinance, 1984 (now Companies Act, 2017). The company was converted into Public Limited Company (unlisted) on 27 January 2017 after complying with the legal formalities. The Company engaged in the business of manufacturing of all types of formulations of Hemodialysis Concentrate in powder and solution form for all brands of machines. Treet Corporation Limited has acquired 45.47% equity stake in the company on 18 January 2017. The registered office of the company is situated at 72-B, Industrial Area, Kot Lakhpat, Lahore.

1.9 Treet Battery Limited was incorporated on 22 February 2019 in Pakistan under the Companies Act, 2017 and in the process of initiating its operations by the period end. The Company will carry out business as manufacturers, assemblers, processors, producers, suppliers, sellers, importers, exporters, makers, fabricators and dealers in all batteries including but not limited to lead acid batteries, deep cycle batteries, lithium batteries, nickel cadmimum batteries, nickel metal hydride batteries, absorbed glass mat (AGM) batteries, Gel batteries used in or required for industrial, transport, commercial and domestic and any other purpose. The registered office of the Company is situated at 72-B, Industrial Area, Kot Lakhpat, Lahore.

2. BASIS OF PREPARATION

These condensed interim financial statements are un-audited and has been prepared in accordance with the requirements of the approved Accounting Standards as applicable in Pakistan relating to Interim Financial Reporting. These condensed interim financial statements do not include all the information required for full annual financial statements, and should be read in conjunction with the financial statements of the Company for the year ended 30 June 2020.

3 ACCOUNTING POLICIES

The accounting policies and the methods of computation adopted in the preparation of these condensed interim financial statements are the same as those applied in preparation of the financial statements for the year ended 30 June 2020.

4 ESTIMATES

The preparation of condensed Interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgments made by management in applying the Company’s accounting policies and the key sources of estimates uncertainty were the same as those that applied to the financial statements for the year ended 30 June 2020.


14


September2020

July to September


6. REVENUE - Net

Blades 1,848,220 1,691,871 Soaps 296,042 270,745 Packaging products 326,329 497,237 Batteries 934,218 718,183 Motor bike project 5,063 37,917 Trading operation 18,674 25,643 Pharmaceutical products 125,523 109,346

3,554,069 3,350,942

7. COST OF REVENUE

Blades (1,194,864) (928,274)Soaps (283,572) (227,961)Packaging products (350,770) (477,884)Batteries (1,049,039) (974,447)Motor bike project (8,121) (40,324)Trading operation (15,738) (18,543)Pharmaceutical products (106,990) (101,123)

(3,009,094) (2,768,556)

8. TRANSACTIONS WITH RELATED PARTIES

The Company enters into transactions with related parties in the normal course of business on an arm’s length basis. Prices for transactions with related parties are determined using admissible valuation methods.

Purchases and services received 130,680 116,108 Goods sold and services rendered 60,480 -

9. These unaudited condensed interim financial statements were authorized for issue by the board of directors October 27, 2020.

5 CONTINGENCIES AND COMMITMENTS

There is no material change in the position of contingent liabilities since the last audited published financial statements.




10. SOCIETY FOR CULTURAL EDUCATION

STATEMENT OF FINANCIAL POSITION (Un-audited)As At September 30, 2020

September 2020 June 2020CURRENT ASSETS (Rupees in thousand)

Loans, advances, deposits, prepayments and other receivables 29,913 4,032 Cash and bank balances (7,518) 32,106

22,395 36,138 CURRENT LIABILITIES

Trade and other payables 96,580 3,027 NET CURRENT ASSETS (74,185) 33,111 NET ASSETS (74,185) 33,111

FINANCED BY:Issued, subscribed and paid-up capital 476,423 450,765 Unappropriated profit / (loss) (550,608) (417,654)

SHARE HOLDERS’ EQUITY (74,185) 33,111 Contingencies and commitments - -

(74,185) 33,111

CONDENSED INTERIM STATEMENT OF INCOME AND EXPENDITURE (Un-audited)For the period ended September 30, 2020


September 2020

July to September


Fees and revenue 979 42,918 Profit on bank deposits - 1,038 Other income - 7

979 43,963 Less:

Salaries, wages and other benefits 39,333 52,611 Fuel and power 1,702 3,118 Repairs and maintenance - Vehicles - 60 Insurance - 838 Advertising - 260 Traveling and conveyance 155 1,063 Printing and stationery 29 1,201 Legal and professional charges 245 92 Computer expenses 20 11 Subscription - 8 Bank charges - 1 Others 126 6,023

41,610 65,286 Net expenses taken to balance sheet (40,631) (21,323)

11. GENERAL

Amounts have been rounded off to thousand rupees.



Imran AzimDirector



FINANCIAL STATEMENTSFOR THE PERIOD ENDED SEPTEMBER 30, 2020

Financial Statements


CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION (UN-AUDITED)As At September 30, 2020

September 2020 June 2020 Un-audited Audited

Note (Rupees in thousand)NON-CURRENT ASSETSProperty, plant and equipment 5 6,005,388 6,090,098 Investment property 12,895 12,896 Long term investments 3,603,635 3,603,635 Long term loans and deposits 22,941 23,922

9,644,859 9,730,551

Current assets Stores and spares 247,604 243,650 Stock-in-trade 886,849 995,749 Trade debts - unsecured considered good 164,318 164,498 Short term investments 294,606 242,184 Loans, advances, deposits, prepayments and other receivables 8,833,804 8,555,582 Cash and bank balances 201,144 186,411

10,628,325 10,388,074 Asset held for sale 1,605,403 1,605,403

Current liabilities Current portion of long term liabilities 23,622 23,622 Short term borrowings 8,104,718 8,668,696 Trade and other payables 1,036,962 832,567 Provision for taxation 126,089 80,632

9,291,391 9,605,517 Net current assets 2,942,337 2,387,960

Non-current liabilitiesLong term deposits 1,213 11,214 Long term loans 291,467 126,672 Deferred liabilities 696,197 726,649

988,877 864,535 Contingencies and commitments 6 - - Net assets 11,598,319 11,253,976

FINANCED BY:Issued, subscribed and paid-up capital 1,708,142 1,698,313 Reserves 5,092,242 5,086,629 Unappropriated profit / (loss) 970,603 636,722 Surplus on revaluation of fixed assets 3,827,332 3,832,312

11,598,319 11,253,976




Imran AzimDirector


18

CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UN-AUDITED)For the period ended September 30, 2020


September2020

July to September

2019Note (Rupees in thousand)

Revenue -Net 7 1,866,894 1,717,514 Cost of revenue 8 (1,224,482) (946,817)Gross Profit / (Loss) 642,412 770,697

- Administrative expenses (115,967) (96,907)- Distribution cost (174,841) (198,422)

(290,808) (295,329)Operating Profit / (Loss) 351,604 475,368

Other income 233,639 9,547

585,243 484,915

Financial expenses (191,187) (285,892) 394,056 199,023

Workers’ Profit Participation Fund (19,703) (9,607)Workers’ Welfare Fund - (3,843)

(19,703) (13,450)

Profit / (Loss) before taxation 374,353 185,573

Taxation (45,452) (45,881)

Profit / (Loss) from continuing operation 328,901 139,692

Earnings / (Loss) per share 1.93 0.84




Imran AzimDirector





September 2020

July to September


Profit after taxation 328,901 139,692

Other comprehensive income Available -for -sale financial assets

Transfer to profit and loss account on disposal - - - -

Total comprehensive income for the period 328,901 139,692

Appropriations have been reflected in the statement of changes in equity.

The attached notes 1 to 11 form an integral part of this condensed interim consolidated financial information.

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)For the period ended September 30, 2020



Imran AzimDirector


20

ShareCapital

Capital Reserve

Surplus on revaluation

of fixed assets

Employee stock op-tion com-pensation

reserve

General Reserve

Fair Value Reserve

Unappropri-ated

Profit

Total

-----------------------------------(Rupees in thousand)-----------------------------------

Balance as on June 30, 2019 1,654,508 4,675,155 3,850,130 10,522 266,400 (7,038) 904,360 11,354,037

Reversal of impairment - - - - - 7,038 - -

Reversal of expense under ESOS - - - (9,759) - - - -

Total comprehensive income for the period - - - - - - 139,692 139,692

Incremental depreciation transferred from surplus on revaluation of property, plant and equipment - - (2,665) - - - 2,665 -

Balance as on September 30, 2019 1,654,508 4,675,155 3,847,465 763 266,400 - 1,046,717 11,493,729

Balance as on June 30, 2020 1,698,313 4,819,495 3,832,312 734 266,400 - 636,722 11,253,976

Issuance of shares under employee share option scheme (ESOS) 9,829 5,613 - - - - - 15,442

Total comprehensive income for the period - - - - - - 328,901 328,901

Incremental depreciation transferred from surplus on revaluation of property, plant and equipment - - (4,980) - - - 4,980 -

Balance as on September 30, 2020 1,708,142 4,825,108 3,827,332 734 266,400 - 970,603

11,598,319

The attached notes 1 to 11 form an integral part of this condensed interim consolidated financial information.

CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (UN-AUDITED)For the period ended September 30, 2020



Imran AzimDirector




CONDENSED INTERIM CONSOLIDATED CASH FLOW STATEMENT (UN-AUDITED)For the period ended September 30, 2020

July to September

2020

July to September


CASH FLOW FROM OPERATING ACTIVITIESProfit / (Loss) before taxation 374,353 185,573 Adjustments for non-cash items :

Financial charges for the period 191,187 285,892 Depreciation on property, plant and equipment 74,675 65,839 Provision for gratuity 15,597 11,793 Provision for superannuation fund scheme 14,242 9,876 Profit on bank deposits (1,239) (1,745)Profit on disposal of investment held for trading (52,419) (9,185)Employees share option scheme (ESOS) - (9,759)Provision for WPPF and WWF 19,703 13,450 (Gain)/Loss on sale of fixed assets (1,938) (7,434)

259,808 358,727 Operating profit / (loss) before working capital changes 634,161 544,300

(Increase) / decrease in operating assets : Stores and spares (3,954) - Stock-in-trade 108,900 (147,898)Trade debts 180 115,817 Short term investments (3) 9,185 Loans, advances, deposits, prepayments and other receivables (245,447) (138,166)

(140,324) (161,062)Increase / (decrease) in operating liabilities

Trade and other payables 217,126 (264,856)Cash generated from /(used in) from operations 710,963 118,382

Financial charges paid (223,627) (236,377)Taxes paid (23,005) (29,607)WPPF and WWF 6 6 Payment to gratuity fund (33,436) 21,243 Payment to superannuation fund (36,620) (18,650)

(316,682) (263,385)Net cash inflow/(outflow) from operating activities 394,281 (145,003)

22

CONDENSED INTERIM CONSOLIDATED CASH FLOW STATEMENT (UN-AUDITED)For the period ended September 30, 2020

July to September

2020

July to September


CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure incurred 795 (80,995)Proceeds from sale of fixed assets 11,179 14,906 Long term investments - - Long term deposits 981 (12,112)Profit received on bank deposits 1,239 1,745 Net cash inflow/(outflow) from investing activities 14,194 (76,456)

CASH FLOW FROM FINANCING ACTIVITIES Share capital 9,829 - Share premium 5,613 - Long Term Loan 164,795 - Long Term Deposits (10,001) 14,996 Dividend paid - 585 Net cash inflow/(outflow) from financing activities 170,236 15,581 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 578,711 (205,878)CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD (8,482,285) (8,557,146)CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (7,903,574) (8,763,024)

CASH AND CASH EQUIVALENTS

Cash and bank balances 201,144 375,597 Finance under mark-up arrangements (8,104,718) (9,138,621)

(7,903,574) (8,763,024)




Imran AzimDirector




NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)For the period ended September 30, 2020

1. STATUS AND NATURE OF THE BUSINESS

Treet Corporation Limited ( “the Company” ) was incorporated in Pakistan on 22 January 1977 as a Public Limited Company under the Companyies Act, 1913 (now Companies Act, 2017). Its shares are listed on Pakistan Stock Exchange Limited. The principal activity of the Company is to manufacture and sale of razors and razor blades along with other trading activities. The registered office of the Company is situated at 72-B, Industrial Area, Kot Lakhpat, Lahore.

2. BASIS OF PREPARATION

These unconsolidated financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:

- International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) as are notified under the provisions of the Companies Act, 2017

- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as notified under the Companies Act, 2017

- Provisions of and directives issued under the Companies Act, 2017

Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS Standards, the provisions of and directives issued under the Companies Act, 2017 have been followed.

These condensed interim unconsolidated financial statements comprise the condensed interim unconsolidated statement of financial position of the Company as at 30 September 2020 and the related condensed interim unconsolidated statement of profit or loss, condensed interim unconsolidated statement of comprehensive income, condensed interim unconsolidated statement of changes in equity and condensed interim unconsolidated statement of cash flows together with the notes forming part thereof.

These condensed interim unconsolidated financial statements are being submitted to the shareholders as required by section 237 of the Companies Act, 2017 and are un-audited as required by Code of Corporate Governance.

These condensed interim unconsolidated financial statements do not include all of the information required for annual financial statements and should be read in conjunction with the annual unconsolidated financial statements as at and for the year ended 30 June 2020. Selected explanatory notes are included to explain events and transactions that are significant to and understanding of the changes in the Company’s financial position and performance since the last financial statements.

Comparative unconsolidated statement of financial position’s numbers are extracted from the annual audited unconsolidated financial statements of the Company for the year ended 30 June 2020, whereas comparative unconsolidated profit or loss, statement of comprehensive income, cash flow statement and statement of changes in equity are stated from unaudited condensed interim unconsolidated financial statements of the Company for the 3 months period ended 30 September 2020.

3. ACCOUNTING POLICIES

Accounting policies adopted for the preparation of these condensed financial statements are the same as those applied in the preparation of the financial statements of the Company for the year ended 30 June 2020 except for the adoption of new standards effective.

24


September 2020

July to September


7. REVENUE - Net

Blades - local 1,166,646 1,143,188 Blades - export 681,574 548,683

1,848,220 1,691,871 Trading operation 18,674 25,643

1,866,894 1,717,514

8. COST OF REVENUE

Blades operation (1,208,741) (928,274)Trading activity (15,741) (18,543)

(1,224,482) (946,817)


4. ESTIMATES

The preparation of condensed Interim financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgments made by management in applying the Company’s accounting policies and the key sources of estimates uncertainty were the same as those that applied to the financial statements for the year ended 30 June 2020.

The provision for taxation for the period has been made on an estimated basis.

5. PROPERTY, PLANT AND EQUIPMENT

The following acquisitions and disposals have been made during 3 months ended 30 September 2020:

Acquisitions Disposals(Cost) (Book value)

(Rupees in thousand)Plant and machinery 61,498 - Furniture and equipment 4,710 162 Vehicles - 6,037

66,208 6,199

6. CONTINGENCIES AND COMMITMENTS

There are no significant changes in the contingent liabilities and commitments since the last audited published financial statements.




September 2020

July to September


9. TRANSACTIONS WITH RELATED PARTIES

Subsidiary- Purchases and services received 12,510 9,263 - Goods sold and services rendered 164,458 -

Associates- Purchases and services received 47,212 51,157 - Goods sold and services rendered 61,385 -

The Company enters into transactions with related parties on an arm’s length basis. Prices for transactions with related parties are determined using admissible valuation methods.

10. These unaudited condensed interim financial statements were authorized for issue by the board of directors October 27, 2020.

11. GENERAL

Amounts have been rounded off to thousand rupees.



Imran AzimDirector



TREET CORPORATION LIMITED

BLADES

RAZORS

SOAPS

BIKES

BATTERIES

CORRUGATEDBOXES

PHARMACEUTICALPRODUCTSPhone: (+92-42) 111 187 338

H E A D O F F I C E72-B, Industrial Area Kot Lakhpat,

Lahore - 54770, Pakistanwww.treetonline.com

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